Kamis, 15 April 2021

FTSE 100 remains upbeat while Wall Street expected to open higher - Proactive Investors UK

  • FTSE 100 adds 55 points
  • US stocks hit new peaks
  • Glaxo lifted by reported stakebuilding

3.57pm: Record breaking markets day

So near. Leading shares are edging ever closer to the elusive 7000 level - last seen more than a year ago - with the FTSE 100 up 55.10 points or 0.79% at 6994.68.

The mid-cap FTSE 250 is already on course for another all time high, up 109.85 points or 0.49% at 22,465.3.

The new records on Wall Street for the Dow Jones Industrial Average and S&P 500 are certainly helping investor sentiment, with the latest US retail sales and jobless claims figures coming in better than expected and pointing to a recovery in the world's biggest economy.

GlaxoSmithKline PLC (LON:GSK) is still top of the pile in the blue chip index following reports an activist investor has taken a stake to shake things up, with its shares now up 5.27% or 68p at 1357.6p.

Miners continue to provide support, with Antofagasta PLC (LON:ANTO) ahead 3.36% or 60.5p at 1863p. And DIY group Kingfisher PLC (LON:KGF), up 3.33% or 11.3p at 351.2p, is benefiting from a positive update from rival Wickes, soon to be spun off from parent company Travis Perkins.

3.11pm: Sainsbury's heads higher

If today's speculation is in GlaxoSmithKline after reports that activist investor Elliott Management had built up a stake, you may remember yesterday's was in J Sainsbury PLC (LON:SBRY).

The catalyst was news that Czech billionaire Daniel Kretinsky has raised his stake in the supermarket from just over 3% to 9.99% through his Vesa investment group. He bought the extra shares from the supermarket's long term investor the Qatar Investment Authority,

Given he once made an unsuccessful bid for German retailer Metro, that naturally set tongues wagging.

But Vesa has subsequently indicated it supports the current Sainsbury's managment team: "This [purchase] reaffirms Vesa’s long-term interest in acquiring strategic minority participations in publicly listed companies across the wider food retail distribution segment, where we continue to perceive Sainsbury’s as an attractive investment opportunity."

In a buy note, analysts at UBS said: "QIA remains a significant shareholder. While we don’t know their plans for the remainder of their 15% stake, that some of their stake was absorbed by an investor who sees Sainsbury as an attractive long term investment opportunity is a modest positive in our view as it removes the risk of an overhang."

Sainsbury's shares are currently up 1.66% or 4p at 244.8p.

As for the FTSE 100, it is edging ever closer to the 7000 level, up 48.61 points or 0.7% at 6988.19 after a strong start on Wall Street, with the Dow Jones Industrial Average and the S&P 500 both hitting new highs.

2.40pm: Wall Street opens in the green

The main indices on Wall Street got off to a positive start on Wednesday as optimism around earnings season held sway.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.67% at 33,956, while the S&P 500 climbed 0.74% to 4,155 and the Nasdaq rose 1% to 13,996.

Sentiment has also been given a boost by the better than expected US retail sales figures as well as the sharp fall in weekly jobless claims.

Back in London, the FTSE 100 had held onto its gains into late afternoon and was up 39 points at 6,978 just before 2.40pm.

1.56pm: US figures beat expectations

US retail sales and weekly jobless claims have both come in better than expected.

Retail sales in particular have surged by 9.8% month on month in March, compared to estimates of a rise of 5.9%-6.3%.

Consumers have clearly been out spending their $1400 stimulus cheques which arrived during the month.

The news has given another lift to US markets, with the Dow Jones Industrial Average now forecast to open up 169 points or 0.48%.

The FTSE 100 meanwhile is up 40.73 points or 0.59% to 6980.31.

1.44pm: Drugmaker tops FTSE 100 risers

GlaxoSmithKline PLC (LON:GSK) has jumped to the top of the FTSE 100 leadboard after a report that an activist investor had taken a stake in the business.

Hedge fund Elliott Management has built up a multibillion pound stake in the drugmaker, according to the Financial Times, leading to a potential battle for the company's future. Shareholders have reportedly become increasingly unhappy with the leadership of chief executive Dame Emma Walmsley. Glaxo is spitting into two next year - a consumer health business and a pharma operation - but in the meantime it has lagged in the race for a COVID-19 vaccine.

Glaxo is up 5.52% or 71.2p to 1360.8p in anticipation of some kind of action.

The move has also perked up the FTSE 100 again, which is now 37.24 points or 0.54% better at 6976.82.

12.40pm: Postive results to lift US markets

Wall Street is forecast to make a postive start to trading, with sentiment still buoyant after Wednesday's positive results from Goldman Sachs.

We have already had better than expected results from Bank of America and PepsiCo to keep the upbeat mood going.

 

Weekly jobless claims are due at 1.30pm BST, and have seen a couple of weeks of increases.

Michael Hewson at CMC Markets UK said: "These increases have run counter to the prevailing narrative of a rapidly recovering labour market, serving to raise eyebrows; however as with any weekly data set it is important not to get too carried away with these sorts of swings. This type of data tends to get revised constantly and as such is likely to swing quite sharply in either direction.

"Expectations are for a decline from 744,000 to 700,000."

Also key will be retail sales, out at 1.30pm BST as well, which will be scrutinised for signs of a boost to the economy, but also inflationary pressures.

Sophie Griffiths at Oanda said: "Investors will be watching US retail sales data for March, which is expected to show a leap in consumer spending. Forecasts are for a 6.3% increase in sales month-on-month, up from a 3.5% decline in February

"Improving weather conditions plus the disbursement of stimulus cheques are factors expected to ramp up retail sales.

"Treasury yields here will be key – a surge in sales could send yields higher and actually drag on stocks. This data will test the extent to which the markets have bought into the Fed’s dovish mantra."

So far the markets are accentuating the positive.

The Dow Jones Industrial Average is forecast to open around 147 points or 0.41% higher at 33,877 while the S&P 500 is set for a similar percentage increase and the Nasdaq Composite expected to rise 0.65%.

In the UK the FTSE 100 is up 21.4 points or 0.31% at 6960.98, once more drifting back from the day's peak.

12.05pm: Booming company profits could boost markets

Why have leading shares recovered so strongly from the pandemic lows, and could the rise continue back to the 7000 level?

Russ Mould, investment director at AJ Bell, has been taking a look at some of the reasons and concludes: perhaps.

He said: “At face value, it does seem odd that the FTSE 100 is trading above its pre-pandemic levels, even if the number of daily new COVID-19 cases are back to where they were last March and last September and the vaccination programme continues apace.

“But it does make sense if you think that the consensus earnings forecasts for the index are...accurate, or even prove too low. An aggregate of the estimates made for each member of the index suggests that the FTSE 100’s total pre-tax profit will be £178bln in 2021 and £205 bln in 2022.

"“Those figures exceed the £166bln made in 2019, before the pandemic hit home."

Miners and oil companies are expected to generate two-thirds of the profit increases in 2021, helped by rising commodity prices on growing hopes of a post-pandemic economic recovery.

Mould said: "Rising commodity prices and steepening yield curves would help to give aggregate earnings a boost, given how they would help the miners, oils and banks respectively and could therefore be a good sign.

"Conversely, falling raw material prices and flattening yield curves would not.

"Investors who buy into the narrative that inflation is coming, after being largely dormant for 40 years, may therefore feel right at home in the UK. Those who still fear debt-ridden deflation may be tempted to steer clear and seek their fortunes elsewhere.”

And despite the current optimism about recovery, that is by no means a given, while some areas of the world are behind in their vaccination programmes which could lead to further setbacks.

At the moment, however, the FTSE 100 remains positive, up 32.04 points or 0.46% at 6971.62.

11.09am: Takeaway growth set to slow

Any investors who bought Deliveroo (LON:ROO) shares at 390p in the recent flotation could be forgiven for hoping the slump since then might be reversed by its first quarter update.

Sadly for them, no such luck.

The shares have lost another 1.78% or 4.8p to 265.4p - albeit above the record low of 242p reached earlier this week - on growing concerns that the takeaway boom might be curtailed by the gradual lifting of lockdown, with people actually allowed to go out and eat again.

Michael Hewson. chief market analyst at CMC Markets UK, said: "The company kept its guidance unchanged for full year annual gross transaction value growth of between 30% to 40%, and a gross profit margin of 7.5% to 8%, though the guidance came with a warning that growth might slow as lockdown restrictions are eased.

"This will be a concern across the sector."

Indeed, Just Eat Takeaway.com NV (LON:JET) has also edged lower, dipping 13p or 0.16% to 7891p.

Overall the FTSE 100 seems unwilling to test the 7000 barrier, and is now up just 19.53 points or 0.28% at 6959.11. But recovery hopes are still keeping markets on the front foot generally.

Chris Beauchamp, chief market analyst at IG, said: "After a positive start to earnings season yesterday [notably Goldman Sachs] equities have continued their push higher, shrugging off a sudden drop in the second half of the US session yesterday.

"Employment numbers out of Australia overnight provided further proof of the ability of economies to bounce back once COVID-19 is under control, and with UK job vacancies also recovering there are firm indications that the theme of global reopening is still valid.

"Still, the main event remains earnings season, with investors hoping that the trend of rebounding corporate income is one that will persist in this reporting period, providing the real foundation for further gains in stock markets." 

10.05am: Analysts bring cheer to drinks group

Investors in Diageo PLC (LON:DGE) are toasting an upgrade from HSBC. 

The drinks giant's shares are up 48p or 1.52% to 3204.5p after the investment bank raised its price target on the drinks giant from 3550p to 3640p.

 Russ Mould, investment director at AJ Bell, said:“Diageo also continues to push forward, having recently been stuck in a tight trading range. Its share price managed to break out of this trend at the start of April and keen chart-watching investors have been latching on to this event ever since. A price target upgrade from a big investment bank also helped the stock."

Ladbrokes owner Entain (LON:ENT) has added 26p or 1.62% to 1633p despite a 13% fall in net gaming revenues for the first quarter as a 33% rise in online business failed to offset a 99% slump in retail revenues, with its shops obviously shut during lockdown.

But the company remained confident about the outlook, and in the background there is also MGM Resorts International. The US group walked away from an £8bn bid in January but the two have a sports betting joint venture, and another punt cannot be entirely ruled out.

Harry Barnick, senior analyst at Third Bridge said: ""The US market has grown faster than punters might have expected. Entain's future growth now hinges on its ability to gain market share in this region. This will pose a significant challenge given the strong competition from DraftKings and FanDuel.

"Investors will continue to speculate whether MGM and Entain could strengthen their relationship by combining operations". 

Meanwhile the FTSE 100 seems to have hit another ceiling, up 33.15 points or 0.48% at 6972.73 but below its peak of 6982.

9.31am: Miners move higher

Leading shares continue to be in a sunny mood, heading in the right direction again and towards the elusive 7000 level.

Mining shares are giving some support as commodity prices, in particular iron ore, move higher on hopes of an economic recovery from the pandemic.

BHP PLC (LON:BHP) is up 31p or 1.4% at 2239p while Rio Tinto PLC (LON:RIO) has risen 80p or 1.37% to 5929p.

This has helped push the FTSE 100 up 35.02 points or 0.5% to 6974.6, while the more domestically focussed FTSE 250 continues to push further into record territory, up 0.32% or 71.75 points to 22,427.2.

Russ Mould, investment director at AJ Bell, said: “The mid cap FTSE 250 index continues to set new record highs...thanks to a mixture of builders’ merchants, housebuilders and airlines. Investors are buying these sectors to play the reopening trade and a general recovery in interest for UK stocks after a long period of being in the doldrums."

8.50am: FTSE 100 edges towards 7000

Will the FTSE 100 suffer another bout of stage fright as it closes in on the 7,000 level?

It’s a landmark level the UK investing public last saw more than a year ago – immediately prior to the first nationwide lockdown.

Recently we've series of mini pullbacks as the index has looked to break through this resistance level.

There is little to suggest Thursday will be the day Footsie pushes on through as the day started in subdued but positive fashion.

Kingfisher (LON:KGF) topped the blue-chip risers with a 2.5% gain in the wake of news that the demerger of rival Wickes should be complete by the end of the month.  The shares are currently trading at levels last seen in 2017.

Wickes’ owner Travis Perkins (LON:TPK), the building supplies group, was up 3.2% after it provided an upbeat update on trading.

The big faller was Legal & General (LON:LGEN), down 3.8%, which began trading without entitlement to a dividend.

Proactive headlines:

Naked Wines Plc (LON:WINE) said sales in the year to March 29 came in ahead of guidance after strong performance in the US.

Caerus Mineral Resources PLC (LON:CMRS) said drilling started yesterday, ahead of schedule, at its N. Mathiatis project in Cyprus and will continue until a systematic grid of drillholes has been completed over the dumps.

AFC Energy PLC (LON:AFC) said it has appointed Gary Bullard as its non-executive chair with immediate effect, succeeding previous incumbent John Rennocks who retired from the board following the company’s AGM on April 14.

SIMEC Atlantis PLC (LON:SAE) said New Technology Capital has requested 6,756,757 ordinary shares in relation to a £500,000 prepayment made by the US investor in December 2020.

Silence Therapeutics PLC (LON:SLN, NASDAQ:SLN) said its medics and scientist has contributed to a peer-reviewed paper that explores the “promising potential” RNA interference (RNAi) therapies for treating heart disease.

PureTech Health PLC (LON:PRTC) said in its full-year results it is well-positioned for an exciting year ahead, which it expects will include multiple value drivers across its wholly-owned programmes and its founded entities.

Iofina PLC (LON:IOF) said there has been a strong recovery in the iodine market with demand at pre-pandemic levels.

Anglo Asian Mining PLC (LON:AAZ) expects its gold production to fall this year, as the Ugur mine in Azerbaijan has now been depleted, although it forecast an increase in copper output.

Emmerson PLC (LON:EML) has completed a concept study to examine the potential to develop its Khemisset potash project in Morocco using a four-phased approach that will significantly reduce upfront capital costs.

1Spatial Plc (LON:SPA) told investors that it has sealed a contract extension with Google, following an initial trial and implementation phase.

Chesnara PLC (LON:CSN) told investors that all remaining conditions to its acquisition of a Dutch insurance portfolio have now been fulfilled.

Capital Ltd (LON:CAPD) reported record quarterly revenue, with growth delivered across all business units, and said it is experiencing the strongest demand environment for drilling services in a decade.

Destiny Pharma PLC (LON: DEST) said Neil Clark and Shaun Claydon will provide a live presentation relating to its full year results for year ending December 31, 2020 via the Investor Meet Company platform on 22 April 2021 at 2pm BST.

Pelatro PLC (LON: PTRO), said Subash Menon, managing director and chief executive, and Nicholos Hellyer, finance director, will provide a live investor presentation via the Investor Meet Company platform on 21st Apr 2021 at 2pm BST.

Metal Tiger PLC (LON:MTR) has subscribed for just over 8.3mln shares in Cobre Ltd at a price of A$0.17 per share. The total investment amounts to A$1.413mln. Cobre is raising A$6.7mln in total. The funds raised by Cobre will be used primarily to finance exploration drilling activities for Kalahari Metals Ltd, the copper-silver exploration joint venture with Metal Tiger that operates in Botswana.

Panther Metals PLC (LON:PALM) said it plans to list its Australian assets on the Australian Securities Exchange, potentially giving them greater access to the capital required to move into development. 

6.50 am: Subdued start predicted 

The FTSE 100 is set to start Thursday on the front foot, albeit only slightly, as global equity markets remain in a holding pattern.

CFD firm IG Markets sees the London benchmark up 9 points making a price of 6,940 to 6,943 with just over an hour until the open.

Asian stocks were weighed by sluggishness in the Chinese economy, meanwhile, western markets are somewhat preoccupied with the mulling of inflation and future monetary concerns (though this still appears to be a problem for later).

“At the beginning of the week there was plenty of speculation that a hot reading on US CPI might give added fuel to the inflation bulls, and in doing so give policymakers at the Federal Reserve some food for thought,” said Michael Hewson, analyst at CMC Markets.

“This was never really likely given that the March CPI numbers were always going to be on the high side given that a year ago the US economy was put into lockdown, thus introducing a deflationary shock on prices, which is only now starting to reverse.

“It will probably need a much more sustained recovery in prices over the next few months before markets become too concerned, however there are still plenty of warning signs in the recent data, due to various supply chain disruptions.”

On Wall Street, the Dow Jones edged 0.16% or 53 points higher to close Wednesday at 33,730.

The S&P 500 meanwhile moved 0.4% lower to 4,124 and the Nasdaq gave up nearly 1% to finish the day at 13,857.

Coinbase, the Bitcoin and cryptocurrency exchange, saw its first hours of trading and as predicted raced to make gains from the reference price set ahead of the listed on Nasdaq. After a US$250 reference price set a US$65bn valuation, the stock’s lowest print follow Wednesday afternoon’s first trade was marked at US$310 – it peak at US$429 intraday and closed at US$328.28.

In Asia, Japan’s Nikkei was practically flat changing hands marked at 29,618.

Hong Kong’s Hang Seng meanwhile fell close to 1% at 28,642 and the Shanghai Composite similarly fell 0.9% to 3,388.

Around the markets

Pound: US$1.3771, down 0.06%

Gold: US$1,742 per ounce, down 0.16%

Silver: US$25.50, up 0.58%

Brent crude: US$66.62 per barrel, up 4.6%

WTI crude: US$63.04 per barrel, up 4.75%

Bitcoin: US$63,016, down 1.94%

6.50am: Early Markets - Asia / Australia

Stocks in the Asia-Pacific region were mixed on Thursday as Australia’s unemployment rate for March came in at 5.6% according to the Australian Bureau of Statistics (ABS), against expectations of a 5.7% reading in a Reuters poll.

The Hang Seng index in Hong Kong fell 1% while the Shanghai Composite in China slipped 0.90%.

In Japan, the Nikkei 225 rose 0.02% and South Korea’s Kospi gained 0.43%.

Shares in Australia advanced, with the S&P/ASX 200 trading 0.60% higher.

READ OUR ASX REPORT HERE

Proactive Australia news:

Element 25 Ltd (ASX:E25) has completed an “extremely successful” first stage of development at the wholly-owned, world-class Butcherbird Project in Western Australia, with the first manganese ore processed through the plant.

Bellevue Gold Ltd (ASX:BGL) (OTCMKTS:BELGF) has delivered a maiden resource of 310,000 ounces at 9.7 g/t gold at its Marceline discovery within its Western Australian eponymous project.

Zelira Therapeutics Ltd (ASX:ZLD) (OTCQB:ZLDAF) (FRA:G1G) achieved record product sales and licensing revenues of A$225,000 during the March quarter - up 249% on the prior six months.

St George Mining Ltd (ASX:SGQ) (FRA:S0G) has discovered new high-grade nickel-copper sulphides at its flagship Mt Alexander Project in Western Australia’s north-eastern Goldfields region, suggesting the presence of a significant mineralised intrusive system.

Red River Resources Ltd (ASX:RVR) continued to ramp up production in Q3 FY21 at its Thalanga Operations in Queensland and Hillgrove Gold Mine in NSW.

PVW Resources Ltd (ASX:PVW) has started a reverse circulation (RC) drilling program at Jungle Well Gold Project within its broader Leonora Project in Western Australia aimed at upgrading the existing inferred resource estimate.

FYI Resources Ltd (ASX:FYI) (FRA:SDL) (OTCMKTS:FYIRF) will start trading on the US-based OTCQX market on Thursday, April 15 (US time), under the stock code OTCQX:FYIRF, after its application to OTC Markets was accepted.

Aeris Resources Ltd’s (ASX:AIS) joint venture partner Helix Resources Ltd (ASX:HLX) has begun diamond drilling at the Canbelego Copper Project in central New South Wales, in proximity to Aeris's Tritton operations.

MGC Pharmaceuticals Ltd (ASX:MXC) (LON:MXC) (OTCMKTS:MGCLF) (FRA:H5O) is poised to supply the global phytocannabinoid-derived medicines market with its portfolio of established and upcoming products through its worldwide distribution footprint and expanding patient base.

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2021-04-15 11:40:00Z
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